March 25 (Bloomberg) -- Malaysian ringgit forwards advanced
for a fifth day after Cyprus reached a deal on an international
bailout, bolstering demand for riskier assets. Government bonds
were little changed.

The agreement, a step toward staving off the threat of a
Cypriot default and a disorderly exit from the euro, was
approved by finance ministers from the 17-nation euro area today
in Brussels. Malaysian inflation will not exceed 2 percent this
year due to subsidies that help cap prices of essential goods
such as rice, sugar and fuel, Deputy Finance Minister Awang Adek
Hussin was quoted as saying in a Bernama news agency report
yesterday. Consumer prices rose 1.6 percent in 2012.

“It’s all about the Cyprus deal, and that news is lifting
the market,” said Sean Yokota, head of Asia strategy at
Skandinaviska Enskilda Banken AB in Singapore. “People are
waiting for the details.”

Twelve-month non-deliverable forwards rose 0.4 percent to
3.1572 per dollar as of 4:05 p.m. in Kuala Lumpur, according to
data compiled by Bloomberg. They have gained 1.1 percent since
March 18. Non-deliverable forwards are settled in dollars.

The contracts to fix an exchange rate in a year’s time were
at a 1.9 percent discount to the spot rate, which advanced 0.5
percent to 3.0982 per dollar. The Malaysian currency will reach
3.03 per dollar by year-end, after some short-term volatility in
the second and third quarters, according to Alliance Bank
Malaysia Bhd.

One-month implied volatility in the ringgit, a measure of
expected moves in the exchange rate used to price options, fell
15 basis points, or 0.15 percentage point, to 6.94 percent.

The yield on the 3.26 percent sovereign bonds due March
2018 was 3.23 percent, according to data compiled by Bloomberg.